CHART OF THE DAY: How To Know If A Recession Is Really On Its Way

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There’s no doubt that there’s been a slew of ugly economic data lately (today’s jobs report being an exception) and suddenly people are talking double dip again.

But not to worry says JPMorgan strategist Thomas J. Lee.

The telltale sign of an impending recession is an inversion of the 30-year-10-year yield spread.

Typically, 30-year bonds yield more than 10-year bonds as a function of people wanting to get paid for not being in riskier assets. When the 30-year yield collapses, watch out.

30-year yields have been coming down, and the spread is narrowing, but we’re nowhere near inversion.

chart of the day, 30yr less 10yr treasury yield spreads, may 2011